Lebanon receives two gas exploration bids: minister
Abi Khalil defends timing of tender, denies politicians behind bidding firms
BEIRUT: Energy and Water Minister Cesar Abi Khalil said Thursday that Lebanon had received two bids to operate the offshore gas blocks but declined to disclose the names of the companies and the blocks that made the bids.
“All that I can say now is that we received two bids and these bids will be evaluated by a special committee. Once the committee finalizes its evaluation and determines whether they meet the requirements then all the information will be revealed to the public,” he told The Daily Star.
The blocks that were offered to interested companies were 1,4,8,9 and 10 out of the 10 blocks that were surveyed by international firms to determine the potential size of hydrocarbon reserves.
But Khalil did not disclose details about the offers made by the international firms.
According to the conditions stipulated by the Lebanese Petroleum Administration, the international companies must form consortiums and each consortium would offer a bid to explore for gas in one of the five blocks that are up for grabs.
“Of course the nationalities of the companies that made the offers are Italian, French and Russian. I can’t say more than that. Once the committee finalizes its report Friday, I will disclose all the details,” Abi Khalil said.
According to the Energy Ministry, 51 companies have qualified to bid in the 2017 round.
The 2013 round prequalified 12 operators to bid along with 34 nonoperating companies.
The U.S. companies apparently did not submit offers to explore for gas off the Lebanese coast although some of them had been among the firms that had prequalified for bidding in 2013 including ExxonMobil and Chevron.
Questions will probably be raised on why the remaining companies that prequalified in 2013 and 2017 did not make any offers to explore for gas in Lebanon.
In his news conference, the minister estimated that it would take five to six years for the winning companies to start the actual extraction of gas off the Lebanese coast.
Abi Khalil warned that some critics would probably start asking about the timing of the tender and why it was held now and if the current prices of oil are suitable to invite companies to bid for gas exploration. “Some may even ask if these companies are shell companies,” he added.
Abi Khalil added that all the bids
were in accordance to the conditions set by the government and the LPA, rejecting any suggestions that politicians may be behind these firms. “Why today? Is the price appropriate today? No doubt that in 2013 the situation was better but still the opportunity is still there. The price of oil does not affect the share of the state, but on the budget of companies that will explore, which should expedite the process of exploration,” he stressed.
Abi Khalil refuted claims that the minister’s powers were excessive. He added that no minister could unilaterally take any crucial decisions without the consent of the entire Cabinet.
Abi Kalil also promised to establish a sovereign fund in the near future In principle all the proceeds from the gas exploration would automatically be allocated to the sovereign fund.
The government was hoping to award the contracts for the winning companies before the end of 2017 and for the actual exploration to start at the beginning of 2018.
It is not certain yet whether the government will be compelled to revise the tender documents or even review the oil tax law if the offers made Thursday were not up to expectations. If the committee gives its seal of approval for the offers Friday, it would be a landmark achievement for Lebanon.